Lamar Advertising Company (NASDAQ:LAMR) Q3 2022 Earnings Conference Call November 4, 2022 9:00 AM ET

Company Participants

Sean Reilly - Chief Executive Officer

Jay Johnson - Chief Financial Officer

Conference Call Participants

Richard Choe - JPMorgan

Operator

Good evening, everyone. [Operator Instructions] Excuse me, everyone. we now have Sean Reilly and Jay Johnson in conference. [Operator Instructions]

In the course of this discussion, Lamar may make forward-looking statements regarding the company, including statements about its future financial performance, strategic goals, plans and objectives, including with respect to the amount and timing of any distributions to stockholders and the impacts and effects of general economic conditions, including inflationary pressures on the company's business, financial condition and results of operations. All forward-looking statements involve risks, uncertainties and contingencies, many of which are beyond Lamar's control, and which may cause actual results to differ materially from anticipated results. Lamar has identified important factors that could cause actual results to differ materially from those discussed in this call in the company's third quarter 2022 earnings release, and its most recent annual report on Form 10-K. Lamar refers you to those documents.

Lamar's third quarter 2022 earnings release, which contains information required by Regulation G regarding certain non-GAAP financial measures, was furnished to the SEC on a Form 8-K this morning and is available on the Investors section of Lamar's website, www.lamar.com.

I would now like to turn the conference over to Sean Reilly. Mr. Reilly, you may begin.

Sean Reilly

Thanks, Todd. Good morning, and Welcome to Lamar's Q3 2022 Earnings Call. As you saw in the release, our third quarter unfolded largely as expected against a strong Q3 2021 comp. We had positive results across most revenue metrics, except one. I will get into the details around that a little later. As I mentioned in the release, the headline pro forma sales growth number for Q3 came in at plus 6%, with local revenue showing significant relative strength over National.

On the expense side, costs continue to normalize as we move through Q4. Expense growth remained a bit elevated in Q3 for reasons we highlighted on calls earlier this year. However, adjusted for extraordinary corporate initiatives, expense growth and operating margins came in as expected. Moreover, we project to end the year with consolidated EBITDA margins around the same 46% margins we achieved in 2021. As a result, we remain on track to hit the high end of our full year AFFO per share guidance. In addition, we will be recommending to our Board a $0.30 per share special dividend on top of our regular quarterly dividend to be paid in December. This will bring our full year 2022 distribution to $5 per share, and we anticipate that, that $1.25 will be our new quarterly run rate for distributions in 2023.